UPDATE – RANDALL HAYES of Seattle, WA SUSPENDED
Randall Hayes, formerly with Morgan Stanley, Suspended Two Years from Securities Industry
Have you lost money with financial advisor Randall Hayes of Seattle, Washington? The Law Firm of Israels & Neuman is investigating allegations made by the Washington Securities Division. In 2018, Washington alleged that Hayes bought and sold inverse and leveraged ETFs (exchange traded funds) in his customers’ accounts without having a reasonable basis that such were suitable for his clients. In 2019, Hayes agreed to pay a $7,000 fine, $3,000 in investigation costs, and a two-year suspension from the securities industry.
Many of Hayes’ clients held these ETFs for months or years, even though they are only meant to be held for intra-day trading. Hayes recommended the purchase of several ETFs, including the Proshares Ultrashort Financials, ProShares Short QQQ, and ProShares Short S&P 500. Washington alleged that during 2013 and 2014, Hayes’ clients held these ETFs for an average of 550 days. Washington seeks to fine and/or suspend Hayes for this conduct.
Inverse and leveraged ETFs are often misused, by retail investors and even financial advisors. The regulators and others have long-warned the securities industry about the dangers of inverse and leveraged ETFs. These are designed to be day-trading vehicles, but often financial advisors recommend holding these ETFs in an investor’s accounts for weeks or even months.
FINRA has stated that “inverse and leveraged ETFs that are reset daily typically are unsuitable for retail investors who plan to hold them for longer than one trading session, particularly in volatile markets.” See FINRA Regulatory Notice 09-31 at page 1. This Notice reminds members who sell these products to “make every effort to familiarize themselves with each customer’s financial situation, trading experience, and ability to meet the risks involved with such products and to make every effort to make customers aware of the pertinent information regarding the products.” Id. at 3, citing to NASD Notice To Members 05-26.
Randall Hayes was a financial advisor and registered representative of Morgan Stanley from 2009 to January 2016. He worked at branch offices in Seattle, Washington. He has been the subject of at least three customer complaints.
Brokerage firms like Morgan Stanley have a responsibility to adequately supervise all representatives who are registered through their firm. Brokerage firms also must take steps to ensure that their financial advisors follow all securities rules and regulations, as well as internal firm policies. When brokerage firms fail to adequately supervise their registered representatives, they may be liable for investment losses sustained by customers.
Israels & Neuman PLC is a securities and investment fraud law firm with offices in Seattle, Vancouver (Washington), and Denver, Colorado. We represent investors in FINRA arbitration proceedings in all 50 states, including investors throughout the Seattle area. Our attorneys have represented over one thousand investors against many brokerage firms in the past, including Morgan Stanley.
Click to view: Hayes, Randall Washington Complaint
Click to view: Hayes, Randall Washington Order
Click to view: Hayes, Randall BrokerCheck 4.9.18
If you lost money with Randall Hayes or Morgan Stanley, please CONTACT US at 720-599-3505 for a free evaluation of your case.
Read Related Article: COMPLAINTS AGAINST RANDALL HAYES
FREE CASE EVALUATION
DENVER: (720) 599-3505
SEATTLE: (206) 795-5798